Google Play marks subscription music service for internet giant

Chris Yerga, engineering director for Android, described Google's new service as “radio without rules.”“This is as lean-back as you want or as interactive as you want,” he said. (David Paul Morris / Bloomberg)

Google Inc. upended the Internet with its search engine.

It launched its own email service, made roads and highways easier to navigate, developed the world's most popular operating system for mobile devices and took a shot at Apple Inc.'s iTunes with its own Google Play store.

Now the technology giant is cranking up the volume with the debut of a subscription music service that provides access to millions of songs for a monthly fee, taking on the likes of Spotify and Pandora and going after the next big wave in digital music: streaming on mobile devices.

Analysts said Google All Access, which was unveiled Wednesday, was a preemptive launch ahead of Apple, which is expected to announce its own service next month.

Google has stepped up its efforts to ensure that Google is on every screen and on every device so online advertisers can reach those consumers wherever they are and regardless of what they are doing.

With music on mobile devices exploding, it was crucial for Google to have its own streaming service to keep users tethered to Google services and Android mobile devices.

That gave the Mountain View, Calif., company the motivation to clinch deals with all the major record labels as well as independents, signaling a sea change in its sometimes troubled relationship with an entertainment industry that in the past had accused Google of not doing enough to combat Internet piracy.

"It makes a huge statement that they've recognized the value of content," said music industry veteran Ted Cohen. "They're recognizing the value of what people create, and they're asking people to pay for it."

Google introduced the new music subscription service at its annual developers conference Wednesday, while unveiling a host of other product upgrades such as a new version of Google Maps.

All Access builds upon Google's other music offerings, which include a download store and a cloud-based "locker" for keeping personal music collections.

The new feature lets users search for songs, albums or artists or different genres and subgenres. It will offer recommendations based on the user's listening habits and personal library of songs.

Subscribers also can listen to music in a "radio" format like Pandora, picking and choosing the playing order, or sample playlists created by music curators.

Chris Yerga, engineering director for Android, described the new service as "radio without rules."

"This is as lean-back as you want or as interactive as you want," he said.

For the music industry, subscription services represent a much-needed new source of revenue.

For the moment, they are a small but fast-growing part of the music industry, contributing about 15% of total revenue in the U.S. last year, according to the Recording Industry Assn. of America.

It's an idea that has been a long time coming: The pioneering Bay Area start-up Listen.com launched the Rhapsody music subscription service in 2001.

The idea began gaining traction with consumers with the advent of smartphones and high-speed mobile networks.

The Swedish company Spotify brought its service to the U.S. two years ago, and has more than 24 million users in 28 countries — 6 million of them paying subscribers. Some industry observers say adoption will be gradual because it requires a shift in consumer behavior.

"Despite all the conversation around Spotify and Rhapsody and other services ... it's going to take some time for consumers to catch up with the idea of leasing music," said the NPD Group's Russ Crupnick.

Rob Wells, president of global digital business at Universal Music Group, said Google's entry into the subscription music business underscores its potential.

"As user adoption of the model continues to grow substantially, we're seeing increasing investment in these types of services — which is contributing to the music business' return to health," Wells said in an email interview.

"Further, in the growing digital music space, there will be a variety of consumer offerings — not a 'one-size-fits-all' model — catering to the distinctive consumer habits and tastes in each of various markets around the world."

Google's entry into the new but growing market for streaming subscription services ramps up competition for established players like Spotify.

Google, which was slow to enter the digital music market, seeks to leverage its enormous reach on mobile devices. About 52% of smartphone users in the U.S., or 71.1 million people, are Android users, according to research firm ComScore. Google said about 900 million Android devices have been activated worldwide.

"Music is one of the most powerful tools for engaging digital customers because they use it every day," said James McQuivey, principal analyst at Forrester Research.

"If Google failed to make a play for the music business, it would later regret it because its customers would remain forever tied to another digital service even if they maintain their interest in Google Android and Chrome devices. This fear of ceding this vulnerability to others explains why Google Play is adding All Access."